COVID-19 Update: Cost-Cutting Measures

Cost-Cutting Measures Still Planned for End of Year

 

 

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The financial pain employees experienced during the pandemic is likely not over yet. According to our recent survey of 330 HR executives at US companies, cost-cutting measures may still be in the works for the final month of 2020. When asked in September, 13 percent of surveyed companies planned to restructure their organization between October and December, 11 percent planned to cut bonuses, 9 percent planned to conduct permanent layoffs, and 8 percent planned to defer pay increases and bonuses. On the positive side, many organizations have been able to reverse some of the cost-cutting actions they took at the beginning of the pandemic, specifically around reducing salaries and wages (25 percent fully reversed). While some businesses have restored cuts made early in the pandemic, many continue to struggle, with dire results for employees. More than one-third of respondents do not expect their organization’s revenue to return to prepandemic levels within the next year. For more HC COVID-19 survey results, see Adapting to the Reimagined Workplace: Human Capital Responses to the COVID-19 Pandemic.